Summary of Rights to Purchase Common Shares



 EXHIBIT 4.3 
  

Exhibit B 
  
 Summary of Rights to Purchase Common Shares 
  
 On August 4, 2004, the Board of Directors of Internet America, Inc. (the “Company”) declared a dividend of one common stock, $.01 par value (the
“Common Shares”) purchase right (a “Right”) for each outstanding Common Share of the Company, and authorized the issuance of one Right for each Common Share which shall become outstanding between the Record Date and the earlier
of the Distribution Date (as hereinafter defined) or the Final Expiration Date of the Rights (as hereinafter defined). The dividend is payable on August 13, 2004 (the “Record Date”) to the shareholders of record on that date. Each Right
entitles the registered holder to purchase from the Company one share of Common Stock, par value $.01 per share (the “Common Shares”), of the Company at a price of $7.00 per one Common Share (the “Purchase Price”), subject to
adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the “Rights Agreement”) between the Company and American Stock Transfer & Trust Company (the “Rights Agent”). 
  
 Until the earlier to occur of (i) ten business days following a public
announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) have acquired beneficial ownership of 15% or more of the outstanding Common Shares and (ii) ten business days following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person or group of 15% or more of such outstanding Common Shares (the earlier of such dates being called
the “Distribution Date”), the Rights will be evidenced, with respect to any Common Share certificate outstanding as of the Record Date, by such Common Share certificate together with a copy of this Summary of Rights attached thereto. The
Rights Agreement provides that, until the Distribution Date, the Rights will be transferred with and only with the Common Shares. 
  
 Until the Distribution Date (or earlier redemption, exchange or expiration of the Rights), new Common Share certificates issued after the Record Date,
upon transfer or new issuance of Common Shares will contain a notation incorporating the Rights Agreement by reference. 
  
 Until the Distribution Date (or earlier redemption, exchange or expiration of the Rights), the surrender for transfer of any certificates for Common
Shares outstanding as of the Record Date, even without such notation or copy of this Summary of Rights being attached thereto, will also constitute the transfer of the Rights associated with the Common Shares represented by such certificate. As soon
as practicable following the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders of record of the Common Shares as of the Close of Business on the Distribution Date and such
separate Right Certificates alone will evidence the Rights. 
  
 The Rights are not exercisable until the Distribution Date. The Rights will expire on August 4, 2014 (the “Final Expiration Date”), unless the Final Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below. 
  

 B-1 








 The Purchase Price payable, and the number of interests in Common Shares or other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Common Shares, (ii) upon the grant to holders of
the Common Shares of certain rights, options or warrants to subscribe for or purchase Common Shares at a price, or securities convertible into Common Shares with a conversion price, less than the then current market price of the Common Shares or
(iii) upon the distribution to holders of the Common Shares of evidences of indebtedness or assets (excluding regular periodic cash dividends paid out of earnings or retained earnings or dividends payable in Common Shares) or of subscription rights
or warrants (other than those referred to above). 
  
 The number
of outstanding Rights and the number of Common Shares issuable upon exercise of each Right are also subject to adjustment in the event of a stock split of the Common Shares or a stock dividend on the Common Shares payable in Common Shares or
subdivisions, consolidations or combinations of the Common Shares occurring, in any such case, prior to the Distribution Date. 
  
 Because of the nature of the Common Shares’ dividend, liquidation and voting rights, the value of the Common Share purchasable upon exercise of each
Right should approximate the value of one Common Share. 
  
 In the
event the Company is, in effect, acquired in a merger or other business combination transaction or 50% or more of its consolidated assets or earning power is sold, proper provision will be made so that each holder of a Right will thereafter
generally have the right to receive, upon the exercise thereof at the then current exercise price of the Right, that number of shares of common stock of the acquiring company which at the time of such transaction will have a market value of two
times the exercise price of the Right. In the event any person becomes an Acquiring Person, proper provision shall be made so that each holder of a Right, other than Rights beneficially owned by the Acquiring Person (which will thereafter be null
and void for all purposes of the Rights Agreement and the holder thereof shall thereafter have no rights with respect to such Rights, whether under the Rights Agreement or otherwise), will thereafter have the right to receive upon exercise that
number of Common Shares having a market value of two times the exercise price of the Right. Under some circumstances, in lieu of Common Shares, other equity and debt securities, property, cash or combinations thereof, including combinations with
Common Shares, may be issued upon payment of the exercise price if of equal value to the number of Common Shares for which the Right is exercisable. 
  
 Under certain circumstances, after a Person has become an Acquiring Person, the Board of Directors of the Company may exchange the Rights (other than
Rights that were or are beneficially owned by an Acquiring Person), in whole or in part, at an exchange ratio of one Common Share per Right (subject to adjustment). 
  
 With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional Common Shares (other than fractions which are integral multiples of one Common Share, which may, at the election of the Company be evidenced by depositary receipts) will be 

 

 B-2 








 issued, and in lieu thereof, an adjustment in cash will be made based on the market price of the Common Shares on the
last trading day prior to the date of exercise. 
  
 At any time
prior to the Close of Business on the tenth business day after the first date of public announcement by the Company or an Acquiring Person that an Acquiring Person has become such (a “Shares Acquisition Date”), the Board of Directors of
the Company may redeem the Rights in whole, but not in part, at a price of $.001 per right (the “Redemption Price”), which may be paid in cash or with Common Shares or other consideration deemed appropriate by the Board of Directors of the
Company. Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. 
  
 Until a Right is exercised, the holder thereof, as such, will have no rights
as a shareholder of the Company, including, without limitation, the right to vote or to receive dividends. 
  
 The terms of the Rights may be amended by the Board of Directors of the Company without the consent of the holders of the Rights at any time to cure any
ambiguity or to correct or supplement any defective or inconsistent provisions and may, prior to the Distribution Date, be amended to change or supplement any other provision in any manner which the Company may deem necessary or desirable. After the
Distribution Date, the terms of the Rights may be amended (other than to cure ambiguities or correct or supplement defective or inconsistent provisions) only so long as such amendment shall not adversely affect the interests of the holders of the
Rights (which may not be an Acquiring Person in whose hands Rights are void). 
  
 A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated August 10, 2004. A copy of the Rights Agreement is available free
of charge from the Company. This summary description of the Rights does not purport to be complete and is qualified in its entirety by reference to the Rights Agreement, which is hereby incorporated herein by reference. 
  

 B-3